Presumption of good faith

In case of alleged forgeries of checks, who has the burden of proving the forgery? This is the question answered in this case of Mr. Ching, a Chinese businessman from Taipei.

Mr. Ching arrived in Manila on January 25, 1979 with a seven day visa. He met a local business partner, Mr. Pong for a possible business partnership venture on Color Scanning. Mr. Pong introduced him to his employees particularly his accountant Leo whom he instructed to assist Mr. Ching in all his personal accounts and in the conversion of his visa from tourist to special non-immigrant. One of the requirements for this change of visa was for Mr. Ching to bring in capital to qualify as foreign investor. So Mr. Ching instructed his bank in Taipei to remit $100,000 to a local bank. When the remittance arrived, the local bank released its peso equivalent in the form of cashier’s check which was picked up by the accountant Leo upon instructions of Mr. Ching. Then Mr. Ching presented said check to the Bureau of Immigration as proof of his compliance for a change of visa as a foreign investor. That was on February 8,1979, date of the expiration of Mr. Ching’s visa.

On the same day afterwards, a current account in the name of Mr. Ching was opened in a branch of another local bank where the cashier’s check amounting to P729,752.20 was deposited. Mr Ching did not personally go to the bank. He only asked Leo who had connections in the bank to get all the forms and then filled it up. Thereafter, a total of P 728,390.00 was withdrawn from the account by way of five checks drawn on different dates between February to October, 1979. No transactions were made on the account since then.

Almost six years later, or sometime in mid-1985, when Mr. Ching checked on his money in the said bank, he discovered that the balance was only P1,362.10. He insisted that he did not cause the opening of the account in the branch as his instructions were for the money to be remitted to its head office, nor its conversion into pesos and its subsequent withdrawals by checks. He alleged that his signatures on the checks were forged. So he sued the bank for the recovery of $100,000 or its peso equivalent at the current rate.

Can Mr. Ching recover the said amount?

No.

Mr Ching’s signatures on the questioned checks amounts to prima facie evidence (evidence on its face) that he issued those checks. By denying that he issued the said checks, it is he who puts into question the authenticity and genuineness of the signatures appearing thereon, and it is he who has the burden of proving that those signatures were forgeries. Forgery, as any other mechanism of fraud, must be proven clearly and convincingly, and the burden of proof lies on the party alleging forgery. The person who alleges fraud or negligence must prove it, because the general presumption is that men act with care and prudence. Good faith is always presumed and it is the burden of the party claiming otherwise to adduce clear and convincing evidence to the contrary. Mr. Ching has not successfully discharged the burden. (Chiang Yia Min vs. Court of Appeals etal. G.R. 137932, March 28,2001)

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